Sunday, September 16, 2012

Alexis Tsipras does it again!

Well, this is one more example of Mr. Tsipras’ showing his political competitors what leadership is all about!

There isn’t really anything in this declaration that a sensible
person could disagree with. And if I were a Greek, I would see a lot of
hope in it.

Personally, I think Mr. Tsipras would be bad news for Greece because I
feel sure that he would do even more of those things which got Greece
into trouble in the first place: an expanded role of the state. I
recognize, however, that this is an assumption on my part and my
assumption may be wrong.

Either way, political leadership is not about complying with all the
things that others, particularly foreigners, expect Greece to do.
Political leadership is about giving people a positive perspective for
the future.

5 comments:

I keep wondering why you would claim that Tsipras will "return Greece to the 1960s".

The sixties, as you probably know, were the time when the fascist military dictator Papadopoulos regime took over after the socialist EDA was expected to win democratic elections.

It is exactly this theft of democracy, initiated with the support of the "anticomunist" west that really is responsible of how greece came to be indebted and how greeks would develop a mindset of "them against us" against their own government.

It could well be that this part of Greece history could have happened again. Tsipras has repeatedly criticised how fascist extremists are not only understimated by the current government but instrumentalized by it.

I do hope that the paranoid fear of the "communist threat" of the 60s is what makes you this fearful of Tsipras.

Because, Tsipras is showing the only possible way that Greece can realistically reduce theit debts "just like germany did in the 50s" (his words exactly).

He called for an audit of the debts to find out what debts would be "odious", just as Argentina, Ecuador or the US controlled Iraq have done previously (Iraq did not really need an audit as the USA simply declared the Iraqy debts to be anulled).

I see you as a good thinker and an honest Banker. Would you not agree that depts that originate in corruption or black mailing of members of a former administration should not be paid back by the people of the country that ows these depts?

Would you really argue that debts that only served the greed of a corrupt elite should be due anyhow?

A banker, who is bribing a signator to get him to sign a debt that the people of the signators country will have to pay and that is fully aware that the money will not be used for the good of the country but to enrich a few criminals is himself a criminal. Wouldn't you agree?

Is the party giving out the credits and bribing the signators of these debts really without fault and should be saved by any means?

My “return Greece to the 60s” was meant strictly in economic terms (i. e. living standard) and not in political terms (i. e. junta). My interpretation of Mr. Tsipras is that he wants to do more of what got Greece into trouble in the first place --- an expanded role for the state. Now you may argue that the “bad guys” will be part of the past and Mr. Tsipras will only surround himself with good guys. I would respond that this is not the way it normally happens. It wouldn’t take the “new guys” very long to adopt the proven methods of the old guys.

Mr. Tsipras, in my assessment, doesn’t understand sufficiently how much Greece depends (and will continue to depend) on foreign funding for its living standard. So if he plans to give foreign funders the shaft, he will do the same thing to the Greek living standard. Greece needs foreign funding for imports; imports mean living standard; without foreign funding, immediate pressure on imports and, consequently, on living standard.

You can’t compare the situation with Germany of the 50s, really. Even if Greece were forgiven all its debt, the economy would still be in trouble because it doesn’t generate enough domestic value. If Mr. Tsipras creates the expectation that all Greece needs to do is to give foreign funders the shaft and then Greeks will live happily ever thereafter within their own means and on their own, then he is cheating his compatriots.

I once wrote this post about conditions under which I could vote for Mr. Tsipras:

Regarding the “odious debt”, to pursue that issue would gain nothing and damage a lot. This is not comparable to the American sub-prime loans because those were loans which were peddled by mortgage salesmen to uninformed, if not to say partially illiterate, people, some of them even without income.

The Greek foreign debt was contracted either by the government’s Debt Management Agency or by the banks (including the Bank of Greece). Certainly the Debt Management Agency and the Bank of Greece had a very high reputation for extreme professionalism and competence. To what extent one can say that about the bankers I don’t know but they certainly knew what they were doing.

If Greece were to repudiate part (or even all) of its debt, it would exclude the country from international financial transactions for a very long period of time (see Argentina as an example). That would be the fastest way to drive the living standard back to the 60s (if not longer).

I will see a positive future for Greece when I sense the following:

* an obsession with import substitution* an obsession with export expansion* an obsession with making tourism/shipping competitive* an obsession with private foreign investment; and, last but certainly not least:* an obsession with the EU Task Force to do everything possible to modernize Greece's public administration and to make Greece a governable state

You got me wrong, Odious debts are not "subprime debts", but a term from international foreign law. It is not really aknowledged by the UN but has been used frequently in the pas (Ecuador, Iraq) to free a country of debts accumulated by former selfish tyrants and corrupt regimes.

http://en.wikipedia.org/wiki/Odious_debt

So if it really is as you say, that the "government’s Debt Management Agency" the parliament, the banks and the administrations were acting proffesionally and free of corruption, this would be a good thing to know.

We wouldnt though, without an audit, and frankly put, i would bet my life on it that this would not be the outcome.

Many of the foreign debts greece now has have been accumulated because of weapon deals.

There has never been a major weapon deal on earth that went down without bribes.

I also would point to a book (I havent read) that obviously found enough debts being odious to fill it.

You say:I will see a positive future for Greece when I sense the following:

an obsession with import substitution* an obsession with export expansion* an obsession with making tourism/shipping competitive* an obsession with private foreign investment; and, last but certainly not least:

So how, can this be acchieved by a country burdened with insurmountable debts?

When are we gonna say, there is a limit to making profits by destabilisation and corruption of countries we allow financial institutions?

Where and when will the people have a say in this?

Are profits and the "trust of investors" more valuable than peace, equality and democracy?

I hope I didn't suggest anywhere that I believed there was no corruption in connection with Greece's foreign debt! Of course there was, and Akis Tsochatzopolous is certainly not the only transgressor. I would even venture to say that much of what had entered Greece as public debt of all left the country as private equity of few.

All I meant to say was that, as opposed to something like sub-prime where many borrowers really were cheated, Greece as the borrower was not cheated or lured into taking up the debt which it did not understand. The acting people involved were highly professional and competent and they certainly knew what they were doing.

Yes, I am familiar with "odious debt" but I just don't think it has any role to play in the Greek or rather the EU context. Or do you think it would be smart for Greece, a member of the EU, to self-indict itself that it has been run by corrupt regimes during its time of EU-membership? That would be equivalent to Greece's saying we really don't fit in the EU; we really are not qualified.

I think this whole debt issue is far overrated and, pardon me for saying so, serves as an excuse for not doing some of the other things that need to get done. No one in this world expects that Greece will ever pay all its debts so whatever happens now is just going through the motions.

Remember that during 2010/11, Greece's foreign debt increased by about 50 BEUR annually. Those were the highest increases ever! So you can't really argue that not getting more loans is Greece's biggest problem and the cause for today's depression.

Let me turn the question around. What would Greece do if all its debt were forgiven? That is really the question to ask because forgiving Greece all its debt would in and by itself solve none of the problems of the economy.

"So what you are saying is, (in other words), that Greece should rather pay the maffia hitmen even if they are criminals bcause its a bad idea to mess with "the godfather" --- NO, I am not saying that. I think Greece will have to, sooner or later, pursue all the criminal Greeks which have contributed to running the country into the ground. That is really not happening yet.

A little reality check is in order here. Greece will need foreign funding for years to come. So it is generally not a very smart thing to do to bite the hand that feeds you. And if you call them Godfather, they might be offended.

You ask how the "obsessions" which I quote can be achieved when there is unsurmoutable debt. Well, as I already said, none of my points has anything to do with Greece's debt. Each one of them could be attacked tomorrow.

I don't see how you can suggest that Greek people have no say in all of this when the country had not only one but, instead, two elections this year. Additionally, surveys still show that a solid majority of Greeks prefers to stay in the Eurozone. Austerity is the prize one has to pay when one has become more expensive than the rest of the currency union members.

Peace, equality, democracy? You are leaving out "opportunity". If Greece does not get its act in order soon, there will be massive drains of talented and very well educated Greeks away from the country. No doubt about it. It's already happening.

The guest-workers of the 1960s/70s were the less educated Greeks. They did admirable work abroad, sent the savings back home and contributed significantly to increasing Greece's living standard. And they returned home. The new migrants will not return once they have left (and I doubt that they will send money back!).